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At the ceremony to break ground last year on a new Toy Story Land in Shanghai, Walt Disney Co.’s Bob Iger was beaming. To his right, and dressed similarly in a black sweater, was the man who could very well take his place as chief executive officer: Bob Chapek.
Shanghai Disneyland went on to exceed 11 million visitors in its first year. That was a big boost for Chapek, who has delivered steady returns as head of the parks and resorts division. In Disney’s fiscal year-end results announced Nov. 9, Chapek’s business was the only one of four major units to post an increase in sales and profit.
Chapek, whose 24-year career at Disney has included roles in the film studio and consumer products, is now viewed as a likely successor to Iger, according to people familiar with the company. While no formal decision has been made, Disney is under pressure to find a replacement because Iger is scheduled to retire in July 2019, leaving 19 months to complete a transition. If history is any guide, Disney may soon name a chief operating officer or president, currently unoccupied roles that Iger held for five years before becoming CEO in 2005.
Chapek’s well-rounded experience is appealing for a company whose business ranges from selling toys in malls to churning out “Star Wars” films. He stands out at a time when other parts of the business are sputtering. Disney’s once-vaunted TV division, home to ESPN, ABC and other channels, reported its second straight year of declining profit this month, as consumers shift to online viewing. The company’s film studio, while still the envy of the industry, was dealt a blow last week when Pixar’s chief creative officer, John Lasseter, took a six-month sabbatical following allegations of inappropriate behavior.
Since taking over the theme-park division in February 2015, Chapek ensured the Shanghai resort, Disney’s largest foreign investment, turned a profit in its first year of operation. He also guided the openings of an “Avatar”-themed attraction in Orlando, Florida, and a “Guardians of the Galaxy” ride in Anaheim, California, that have led to attendance gains this year at the company’s domestic theme parks.
In July Chapek unveiled a flurry of new projects at the parks, including a “Star Wars”-themed hotel in Orlando and Marvel superhero rides in Anaheim. Disney told investors on Nov. 9 that its budget for investments in the parks will expand this fiscal year by about $1 billion.
Fortunes rise and fall within Disney all the time, and a leading contender can quickly lose favor. Iger, 66, has thrice postponed retirement with contract extensions, but said last month that “this time I mean it.” While Disney has conducted a multiyear succession process in the past, a number of senior managers who would have been candidates to replace Iger have left the company, among them former Chief Financial Officer Jay Rasulo and Thomas Staggs, another former parks chief.
Staggs was seen as the likely heir given his promotion to COO in February 2015, more than two years in advance of Iger’s then-scheduled retirement. But last year he stepped down after being told the board had lost confidence in him.
Chapek joined Disney after working in marketing at H.J. Heinz Co., the food-processing company, and at agency J. Walter Thompson. At Disney, Chapek reorganized the consumer-products division, cutting jobs and focusing the business on brands rather than lines of merchandise.
At the parks division, Chapek has focused on pricing, introducing a tiered system of tickets that cost more during peak times and eliminating some annual passes. He’s searched for ways to get patrons to pay extra for perks such as nighttime events and passes to get to the head of the line in the company’s California parks.
An Indiana native, Chapek cultivates palm trees at his homes in California and Florida. He said in an interview earlier this year that when he was growing up, his family went to Walt Disney World as an annual holiday outing.
“I was sort of umbilically tied to it from the time I was really young,” Chapek said. “So, coming to Disney was a dream for me.”
Investors are likely to find out in the coming months whether he’s exceeded even his wildest dreams.
©2017 Bloomberg L.P.